Hi -
I made Roth IRA contributions of $6k each in 2019 and 2020 for those respective years in both me and my spouse's names (total $24k). At the time of preparing the 2019 tax return in June 2020, I realized all our contributions were ineligible because of income limits. So I decided to recharacterize both my contributions to a traditional IRA and remove the two excess contributions made on my spouse's name. All accounts had losses by this time (each $6k contribution suffered a loss)
In the 2019 tax return, I entered my contribution as recharacterized from Roth to traditional IRA. This generated a form 8606 and explanation statement in the return.
For my spouse, I said the the excess contribution was removed - I had an excess removal of the $6k (which had a loss of $500 - so net $5500) processed by the broker. In the 2019 return, this did not generate any form and I did not include anything else with the return. I did not do anything with the 2020 contribution because I did not know I could remove it at that time. So it stayed in the account as cash (about $5500)
Now, in 2020 return, I am again entering my contribution for 2020 as recharacterized from Roth to traditional IRA which is generating a 8606 and explanation statement.
For my spouse, I asked the broker to process an excess removal - the excess contribution removal was processed a few days back. I indicated an entire excess removal of $6k (net $5500) in TT which is not generating any other form.
The broker where the accounts are has so far generated three 2020 1099-R's in Feb 2021.
- 1 with codes PJ in box 7 for my spouse's excess removal of 2019 contribution (no other boxes filled or checked except Box 1 saying $5500)
- 1 with code R for my 2019 contribution recharacterization (Box 1 has amount and 2a has $0 - no other boxes checked or filled)
- 1 with code N for my 2020 contribution recharacterization (Box 1 has amount and 2a has $0 - no other boxes checked or filled)
They said the 1099-R for my spouse's excess removal of 2020 contribution will generate in 2022 (as a 2021 1099-R):
At present, I am a bit confused what forms I need to file or if I need to amend anything. My questions:
1. Was my 2019 filing accurate? (Has only one 8606 and explanation for my recharacterization - no 1099-R forms as I did not know I could generate one manually)
2. Is my 2020 filing accurate? (Has only one 8606 and explanation for my recharacterization - no other forms)
3. Should I generate any 1099-R forms for the three 2020 1099-Rs I received and file with my 2020 return (electronic filing)?
4. Is there any need to amend my 2019 return? If so, what should I include and explain?
I made a big mess - sorry for the long question and thanks in advance for your patience.
